Franchise vs Network Marketing Business Opportunities

In the current economic climate, now more than ever, people are taking charge of their own destinies. Stepping outside of the often unpredictable corporate world and into self-employment ventures can help secure financial and personal freedom. Not all opportunities are created equal.

There are a number of different self-employment opportunities available, but among the most popular are franchise and network marketing ventures. When deciding which business structure is right for you, it’s important to objectively compare the advantages and disadvantages of both business models.

Initial Capital Investment

Any business requires some sort of capital to get started — how much capital will depend on the governing structure of the business. In the case of a franchise, a new business entrant will need to put up a significant capital investment of funds along with the associated risk to get the business up and running. This usually funds the lease of a premises, stock or inventory, business equipment, and staff.

A network marketing structure, on the other hand, can be started with a reasonably low capital outlay. This is usually because its structures tend to lend themselves toward home-based business as well as sole-trader operations. In addition, there is little to no need to maintain an inventory base investment.

Product and Business Training

Both the structures offer good resources for initial and ongoing product and general business training. Network marketing provides a higher level of training support due to the invested interest of the other parties within the network with regards to the owners personal success achievement. However, how pronounced this difference is depends on the individual business’s commitment to training and ongoing valuable support.

Life Balance

Certainly, in the initial stages of the business, the networking format seems to provide a greater work/life balance. This is because you have greater control and flexibility of your working hours and a bigger support group consisting of more advanced vendors to guide and direct you towards a path of success. Comparatively, the large capital investment in the initial stages of a franchise and a more competitive marketplace make it less likely that you will be able to achieve comparable return on investment compared to the leveraging provided through network marketing in the same timeframe. However, in the longer term, once you have developed a franchise to operate optimally, you can work toward removing yourself from the business, relying on staff and key management personnel that you have placed within your organization, and work when needed.